NEW POLICY ON HDB FLAT SELECTION

Mr Chng Hee Kok asked the Minister for National Development how many applicants for the Housing and Development Board flats have failed to make a third and final selection of a flat since the implementation of the Board's policy to restrict opportunities for selection of new flats to three.

The Minister of State for National Development (Dr Lee Boon Yang) (for the Minister for National Development): Sir, between early February 1986 when the policy to restrict to three opportunities to select flats was implemented and 30th June 1988, 885 applicants on the queue to buy HDB flats had failed to make a third and final selection of a flat. Their applications were cancelled by the HDB. This number is a small percentage of the 61,000 applications on the waiting list as at the same date.

Mr Chng Hee Kok (Radin Mas): Will the Minister of State direct the HDB to consider granting these applicants one final selection under the "walk in" selection scheme?

Dr Lee Boon Yang: Mr Speaker, Sir, let me explain how this 3-offer system of selection of flats is implemented.

HDB does not consider every invitation to an applicant to select flat as an offer under the scheme. An invitation to select a flat becomes an offer only when the applicant's queue number is within the top 50% of the number of flats available for selection in the exercise. Let me give him an example. If there are 100 flats available for selection, HDB will call at least 100 applicants to select flats. Only the first 50 applicants in this case will have their offers constituted as one of the offers under the "three opportunities to select scheme"; the rest will not be constituted as an offer. The letter to the first 50 applicants will state clearly that this is an offer for him to select. And if they had rejected a similar offer previously, then the letter will state, "This is your second offer". So they know very clearly that they had already rejected one offer under the scheme and that they now have a chance to make second selection. And if they reject it, then there will be a third offer.

To make sure that nobody misunderstands or that there is miscommunication, when HDB sends out the third offer to the applicant, it is sent by registered mail and it is clearly stated that "this is your third and final offer". Therefore, all applicants on the waiting list for HDB flats are kept very well informed of their position on the waiting list. To consider an extension of the scheme to a fourth offer would really impose a burden on the rest of the people who are on the waiting list. The Member must understand that each time somebody rejects an offer, somebody else further down the waiting list will have his chance to select a flat delayed and if people higher up on the waiting list continually reject the flats that are offered to them, those people who are lower on the waiting list will never get a chance to select their flat. Hence HDB has to adopt this 3-offer selection system.

Maj Fong Sip Chee (Kampong Chai Chee): Sir, would the Minister consider that the measure just taken is retroactive and punitive? Would not the Minister agree that the rule, as he said, came into operation in February 1986, retroactive and punitive? In other words, the Minister has announced that if an applicant was found to have rejected a third offer, his application would be cancelled. Would the Minister agree therefore that this rule would apply to those people who have rejected two offers before? In other words, this rule is retroactive and punitive?

Dr Lee Boon Yang: The rule was announced in February 1986 and only those people who reject the offer under the scheme as of February 1986 would be considered under the scheme.

Mr Chiam See Tong: Can the Minister of State please tell us whether or not after the third rejection the application is cancelled and the applicant's deposit returned to him?

Dr Lee Boon Yang: Mr Speaker, Sir, when the third offer has been rejected, the applicant is no longer on the queue. He is put back to the end and has to start again, and he will lose his deposit. In the case of those who are applying for the first time, they will lose a $200 administrative fee. For those who have applied as a means of upgrading, in other words, they are already living in an HDB flat and have applied to purchase a larger flat, they lose a higher administrative fee of $600. These charges are necessary to discourage frivolous applications.

Mr Chng Hee Kok: On top of this, will the Minister of State agree that they also lose their interest charges on the deposit that is placed with the HDB?

Dr Lee Boon Yang: As I have explained, Mr Speaker, Sir, the scheme is to encourage people to select flats made available to them as soon as possible. Otherwise those people who are lower down on the waiting list will lose even more interest because they have paid their deposit and if the applicant higher up on the queue does not take up the flat, they will have to wait a long time - years. And who is going to bear those interest charges in their case then?

Mr Heng Chiang Meng (Jalan Kayu): Sir, may I ask the Minister of State whether an applicant, when receiving a second offer as stated in the letter, can refuse the offer by writing in saying, "I do not want to accept this offer" and therefore will be considered as having only rejected the first offer?

Dr Lee Boon Yang: Mr Speaker, Sir, offers to applicants on the waiting list are made according to the queue number. When the queue number is due, an offer is made. To allow an applicant to write in to say, "I would like to defer this selection exercise and I would like to opt out of it" would mean that it would nullify the whole objective of this scheme.

Mr Heng Chiang Meng: Sir, would the Minister not agree that the whole purpose of this scheme is to ensure that the applicant gets the flat he desires? Therefore, if he is given a second offer and the list of flats is not in the location or not in the place that he wants, should he not be given a choice to opt out of the offer? After all, he will give people lower down the list a chance to get the flats that they desire.

Dr Lee Boon Yang: Mr Speaker, Sir, when people apply for flats they indicate the zone of preference and offers to them are made on that basis. But HDB will never undertake and it is impossible for HDB to provide every applicant on the waiting list with an ideal flat suited to every requirement of the applicant. Therefore, we need to have a scheme whereby people are encouraged to make their selection of flats as soon as possible in order to keep the queue moving.

Maj Fong Sip Chee: Would the Minister not consider it fairer that those who reject the third offer would have their priority relegated to lower priority, rather than to cancel their applications which entail a re-application and the confiscation of the deposit? Would the Minister not consider it fairer to these people?

Dr Lee Boon Yang: Mr Speaker, Sir, the Member says reassign them a different priority - where? Somewhere in between, ie the beginning of the queue and where they were before. If you take that approach, then you are still inconveniencing and delaying other people lower down the queue. So at what point do you reallocate his position in the queue?

I think HDB has to take the approach that there are 61,000 applicants on the queue and there is a need to enable each of them to make a selection as soon as possible. For those who have been given ample opportunities to select but refuse to take up the flats, then this must indicate to HDB that they are not in urgent need of housing and that they can afford to wait a little bit longer. If that is the case, perhaps they can start again at the bottom of the queue. Then again, they may want to change their choice of location. They may want to apply for flats in another zone. It is entirely up to them.

Maj Fong Sip Chee: Would not the Minister place that application as 'dormant' application and allow the applicant to inform the HDB that he wants his application to be considered now? This will not deprive the others.

Dr Lee Boon Yang: Mr Speaker, Sir, how does HDB place such applicants as 'dormant' applicants and yet at the time when they want to have a flat provide the flats immediately to them? Would that be fair to all the other applicants who have been patiently waiting and are on the list and they have gone and made their selection?

Maj Fong Sip Chee: I think the Minister misunderstands me. Perhaps I was not clear. I am sorry for that. What I mean is that a person has got to inform the HDB subsequently that he wants his application to be considered now, or rather, to take it from the dormant pool. Then his priority will start on that day. It does not go back to his old priority. It is on that day.

Dr Lee Boon Yang: Mr Speaker, Sir, leave it to the applicant to decide how long he wants his application to remain dormant? That means, he goes back, he considers it and then he re-applies when he wants to activate his application again.

Mr Heng Chiang Meng: Sir, truly I fail to understand the logic of the reply given by the Minister of State because if somebody higher up on the priority list is prepared to give early notice of opting out, surely this means that people lower down the list have a better chance of getting the flat that they want. This means that the queue will move faster which is in accordance with his objective. I do not see any reason why the Minister cannot allow people to opt out of the selection if they give prior notice.

Dr Lee Boon Yang: That may be so, Mr Speaker, Sir. Every time somebody rejects a flat, he remains in the queue. Subsequently, if there are more flats available they have to be offered to these people first before they can be offered to others on the waiting list. In other words, they will continue to enjoy the opportunity of having the pick of the crop and retaining their position high up in the queue; and that is not being fair to those people who are lower down in the queue.

The following Question stood in the name of Dr Aline K. Wong ---